Quiz 19

An Insurance Claims Analysis Bureau shall perform the following functions: All of the above Promote training Disseminate information Gather information

All of the above

A Special Surplus Line broker may transact all of the following except: Insurance on property being exported by land or water Aircraft insurance Insurance on antique automobiles

Insurance on antique automobiles

The following are fair discriminations which would allow an insurer to increase the insured's auto rate except? Insured has only be driving for 1 year Insured has been divorced DUI on their driving record

Insured has been divorced

This law was the first to recognize that state regulation of the insurance industry was in the public's best interest. Paul vs. Virginia United States vs. Southeaster Underwriters Association McCarren-Ferguson Act

Paul vs. Virginia

HIPPA addresses how licensees must protect clients: None of these medical information personal information

medical information

The penalties for the insurer for unfair discrimination violation determined to be a general business practice is: $25,000-$50,000 $15,000-$100,000 $5,000-$25,000

$15,000-$100,000

A unwillful violation of Unfair Practice can be fined up to: $1,000 per violation $20,000 per violation $10,000 per violation $5,000 per violation

$5,000 per violation

#14 Which of the following CIGA claims would be covered and paid in full? A property damage claim in the amount of $600 on a policy that has a $500 deductible bodily injury claim in the amount of $1000 on a policy that has a $1000 deductible A homeowners claim in the amount of $750,000 on a policy that has a $1000 deductible and a limit of $500,000 A workers' compensation claim in the amount of $90.

A bodily injury claim in the amount of $1000 on a policy that has a $1000 deductible

The follow are all responsibilities of the Commissioner of Insurance except: Authority to change the code but may not write new laws Issue regulations that establish how the DOI intends to interpret and enforce the law Oversee the DOI, directing all its affairs and staff in compliance with the code Appoint people to negotiate settlements with agents or insurers who have violated the code

Authority to change the code but may not write new laws

Every company in California is required to report its financial condition to the Commissioner: Every year, by Dec 31st Every year, on or before March 1st Every month

Every year, on or before March 1st

No rate shall be approved or remain in effect that contains all of the following except: Excessively higher than the competition Violation of the California Insurance Code Unfairly discriminatory

Excessively higher than the competition

Which of the following statements are not true? Insurance prosecutors may prosecute insurance fraud as a misdemeanor. If convicted of insurance fraud the fine could be twice the amount of the fraud. Full repayment to victims can be required instead of the fine amount.

Full repayment to victims can be required instead of the fine amount.

The insurance Commissioner is elected at the same time as the: State Representatives President Governor

Governor

#2 Cal-GLBA affects many aspects of agents business EXCEPT: An Opt in and Opt out system. How the agent services, defends, and pay claims. How client files are secured.

How the agent services, defends, and pay claims.

Which of the following statements are true with regards to rate approval in the State of CA? Insurers are required to deliver evidence that the rates are reasonable and fair. The Commissioner has a maximum of 90 days to approve or reject the rates. The CA DOI uses the Open Approval system for rates.

Insurers are required to deliver evidence that the rates are reasonable and fair.

In order to purchase P/C insurance, you must be able to show insurable interest. Which of the following would not meet the insurable interest requirement? Jason owns a beach home as a secondary residence and wants insurance Jason wants insurance on a car which he sold to his best friend but Jason still carries the bank loan on the car Jason obtained a loan so he could buy a car for his sister who drives it 100% of the time and he wants insurance Jason wants insurance for his father's home

Jason wants insurance for his father's home

All of the following are types of Valuations used by insurers except: Stated Value Agreed Value Replacement Cost Value Market Value minus the depreciation.

Market Value minus the depreciation.

This law recognized that state regulation of the insurance industry was in the public's best interest and EXEMPTED the insurance industry from the federal regulation required for most interstate commerce industries. Paul vs. Virginia 1869 McCareen-Ferguson Act of 1945 SEUA Case of 1944

McCareen-Ferguson Act of 1945

Public Law 15 exempted insurers from most federal regulation is known as: McCarran-Ferguson Act Gramm-Bliley Act ERISA Regulations

McCarran-Ferguson Act

The specific classifications which cannot exist include the following except: Religion Ancestry Nicotine use

Nicotine use

What is the main role of the Commissioner and the Department of Insurance? Regulate the conduct of agents and insurers in California Regulate the business of insurance in California Administer the California Insurance Code

Regulate the conduct of agents and insurers in California

What type of Valuation would this statement be: An appraised $200,000 house burns and is a total loss? The insurance company pays $230,000 to rebuild the house. Actual Cash Value Market Value Valuation Value Replacement cost value

Replacement cost value

CIGA protects policyholders against insolvency of all the following, except: Self-insurers Auto Insurers Burglary insurance Marine Insurers

Self-insurers

Which of the following is not true with regards to Surplus lines? Surplus lines insurers are unregulated but operate under each state's Surplus lines laws Surplus lines insurers are admitted insurers who specialize in offering insurance to the high risk market Most states require that Surplus lines insurers be on the state's approved list. The type of business Surplus lines insurers offer is referred to as Excess Lines Insurance

Surplus lines insurers are admitted insurers who specialize in offering insurance to the high risk market

The following are true in regards to the California Insurance Guarantee Association except: The purpose of the association is that each member be provided with insolvency insurance The Association is directed by a 9 member Board of Governors who are elected by voters for a two year term The association is funded by its member insurers

The Association is directed by a 9 member Board of Governors who are elected by voters for a two year term

All of the following are true regarding the Gramm-Leach-Bliley Act except: The GLB is also know as the Financial Modernization Act of 1999. The GLB allows the administration of the Financial Privacy Rule and the Safeguards Rule. The GLB act gives authority eight federal agencies. The GLB includes provisions to protect consumers against insurance companies financial failure.

The GLB includes provisions to protect consumers against insurance companies financial failure.

#5 Since CA uses the Prior Approval system in filing rates, what happens if the Commissioner fails to respond within 60 days? The company may use the filed rates and may consider them approved The company must file a request to receive the reasons why the filed rates are being rejected and resubmit new filing. The company may not use the filed rates until the Commissioner has either approved or rejected the rates

The company may use the filed rates and may consider them approved

Which of the following means Insolvency? An insurer must also possess additional assets equivalent to such aggregate Not being able to meet the many financial, technical, and legal qualifications that must actually be met by the code The inability of the insurer to meet its financial obligations when they are due Being able to provide for all its liabilities and for reinsurance of all outstanding risks

The inability of the insurer to meet its financial obligations when they are due

Which of the following statements with regards to the CIGA is true? The maximum claim covered is $500,000. Covered claims do include claims of $100 or less. The Association is funded by premium payments of the consumers.

The maximum claim covered is $500,000.

What regulates trade practices in the insurance business accordance with the intent of Congress? Uniform Insurers Rehabilitation Act The California Administrative Code of Regulations Unfair Practices Article Public Law #15

Unfair Practices Article

Advising a client to obtain the services of an attorney is considered to be: both a violation and unfair practice acceptable an unfair practice a violation

acceptable

California Privacy Act established standards concerning insurance for: collection of information All of the above disclosure of information use of information

all of the above

For an insurer to be solvent they must have enough assets to cover: reinsurance All of these paid-in-capital liabilities

all of these

According to the Code the fastest growing area of fraudulent activities is: workers comp fraud health insurance fraud None of the above auto insurance fraud

auto insurance fraud

Which one of the following would be considered an acceptable actuarial classification for discrimination? The religion someone might practice The color of someone skin How much someone weighs

weight